Insurance Convention Focuses On Booming Health Care Industry

HARTFORD — Federal health care reform gave more people medical coverage but did not adequately address the rising cost of health care, top insurance executives said Thursday at an industry convention.

If there's a benefit to the rising costs of health care, it's that employment in health insurance and the health care industry has grown steadily and is expected to continue to grow. The ballooning health care industry, hardly a new topic, remains a key theme among "mega trends" discussed Thursday at the Connecticut Convention Center.

More than 350 insurance professionals gathered for the 2014 Insurance Market Forecast hosted by the Connecticut Insurance and Financial Services Cluster, an initiative of the MetroHartford Alliance to sustain and grow employment and the economy in Connecticut.

One of the hour-long sessions focused on health insurance, and moderator Jeffrey Gitlin of PricewaterhouseCoopers started by asking a four-member panel of executives how the Affordable Care Act, often called Obamacare, is working.

"I would say what's working well is, obviously, it's the access and coverage," said Martha R. Temple, president of Aetna's New England Market.

She cited the 7.3 million Americans who enrolled for medical coverage through the federal and state-based health insurance exchanges. The White House revised that number to 7.1 million earlier this month.

"So, that's all really good, and that was one of the major goals of the ACA, was to get people coverage, but there are still challenges," Temple said. "Some of those challenges are around cost and quality."

Temple said there has not beenenough consumer choice of health plans since the Affordable Care Act was passed. Health plans are very scripted as a result of federal requirements.

ConnectiCare President Michael Wise said if the metric of success is enrollment, then the Affordable Care Act has been a success. But Wise wondered aloud whether taxpayers can continue to subsidize private health plans to this degree.

Wise said his company has found that 89 percent of people who buy private health plans on the Connecticut exchange, Access Health CT, receive a federal tax credit, or subsidy. About 80 percent of people with a subsidy are getting half of the cost subsidized, Wise said.

"When you think about rolling that out nationwide, you clearly have a policy issue about whether that entitlement to that degree is actually sustainable or not," Wise said.

Wise, Temple and the heads of Anthem Blue Cross and Blue Shield in Connecticut and UnitedHealthcare of New England Inc., talked about the ways their companies are teaming with doctor groups and hospitals to reduce costs through accountable care and other methods.

If there's a benefit to the enormous and complex health care industry, it's the job growth. Direct employment by health and medical insurers grew by about 2,100 jobs to 498,300 workers nationally between August and September, according to the Insurance Information Institute, an industry trade group and think tank.

The industry has seen steady growth for the past 25 years, said Robert Hartwig, an economist and president of the insurance institute. In a wide ranging discussion about all forms of insurance, a segment about insurance employment showed no other sector of insurance grew as much as health and medical.

U.S. health care expenditures have been on a "relentless climb for most of the past half-century," Hartwig said in his presentation. Between 1965 and 2013, U.S. health care expenditures increased 69-fold, he said. During the same period, population growth increased just 1.6-fold, he said.

As a share of the nation's Gross Domestic Product, health care expenditures were 5.8 percent in 1965 and have been roughly 18 percent since 2009, Hartwig said.

Americans are spending about $3 trillion annually on health care, and the government expects costs are going to continue until the industry is 20 percent of the U.S. Gross Domestic Product by 2022, Hartwig said.

"One out of $5 in the U.S. economy is going to be associated with health care expenditures, and a lot of that is going to be cycled through the health care insurance business," he said. "That's why this is a growth industry for the indefinite future."